tv In the Loop With Betty Liu Bloomberg September 8, 2014 8:00am-10:01am EDT
airlines? charging you extra fees for everything. arne sorenson on why he is not only charging you more but charging it -- charging you less than three years. victory.rating a go girl. down 26%, why is that? no big names competing and no american names. speaking to the amazing ryan brothers. at our top's a look headlines. barack obama is getting ready to outline a military campaign against islamic states. no u.s. ground troops will be involved. the president's base the nation wednesday. ge's program.uy
gm, get this, has joined the that canuild the cars drive themselves. driverless cars. within two years, gm will offer a hands-free driving system on their cadillac designed to help them avoid crashes. people get into crashes and not the cars themselves. are watchingry we closely as alibaba. kicking off its roadshow today here in new york. joined., we are you are not too long ago in hong kong. what do we find out in this? >> thank you. good morning to you. if you take a look on friday, we saw four key pieces of information. this will be a record breaking deal in the united states.
priced at 66 billion dollars there it this will be the third most valuable company in the united states for an in dash for internet company trades here. three is existing investors. .ot everyone will be selling the executive vice chairman will be selling. yahoo! has a 23% stake and will dilute themselves. not is their largest investor, 34%. we actually got a four-page letter written by the founder where he talks about the company's vision, he talks about how he knows he will face controversy but he believes it will set the stage for constructive debate. i found surprising he did not go into many details, that he will customers first,
employees second and shareholders third. he did not go into too many details on what that means now the has public investors. >> i agree. it sounds a lot like jeff asus and the letter he writes out here and what will be notable? what should we expect on this roadshow? meetings, how many are classifying what is happening? we know downtown a few blocks investors and the senior leadership that alibaba are meeting to go through various details. do not expect too many surprises. there are going to be risks associated with this type of investing if you could outline those two attentional clients. from new york, he will do pretty much just the eastern seaboard. the -- then go west to san francisco. hong kong on the 15th.
he will be back here in new york again on the 18th. we expect a few shares to start trading on the 19th. >> roadshows are growing. physicallyt to be fit. thank you. do not miss the alibaba story, .ur special tonight right here in the meantime, breaking news, just crossing the wires here. and chairman is stepping down from the company. olivia sterns has more from the news desk on this transition. >> that is right. it is for personal reasons. know she has been under ceosure to replace mark as
because it had to restate its entire 2014 earnings. the target of several activist investors, including carl icahn. he himself has built up in a white 5% stake. also said this morning they will proceed with plans to separate the rental business from the actual car rental business. an interesting development, under pressure to replace after seeing those results. stepping down for personal reasons. back to you. .> thank you so much stepping down, the ceo. back in washington, president obama says the u.s. will go on the offensive in the middle east and he will further outline his plans on wednesday in a new speech. the tragedy will count on sunni nations to step up and take leading roles. phil mattingly is just back from , where he also made
several pieces of news lonnie was there. we heard from the president this weekend, a pretty frank conversation coming out from him. what are white house officials telling you he will announce on wednesday? is this focus right now is an opportunity to lay out in detail everything the white house administration and the u.s. as a whole will do to counter the state thus far and put together in a coherent way what they will do going forward you have seen the airstrikes going on in iraq. hereill see a lot of that more than anything else, take a listen. >> what i will ask the american people to understand is this is a serious threat, we have the
capacity to do with it, here is how we are going to deal with it. to make surengress they understand and support what our plan is. it will require resources above what we're currently doing. he will lay out some reasons why he may take that action in the future very >> the president was asked about a much criticized decision. he headed to the golf course just moments after he made the remarks on the murder of u.s. journalist james foley. watching that interview, he sounded like he understood that was a gas there. -- a gaffe there. a tell you with about what the president says.
they do not like feeling like they have to do something just because the media expects it. it is something the president underscored when he talked to -- when he talked to chuck todd. is, it is not always comest naturally to me, but it matters. i am mindful of that. >> it matters. that is what the president was attempting to it knowledge during that interview. >> thank you so much. our white house correspondent. jobs. has 142,000 jobs in august, the worst month for growth, jobs growth this year. it is a point -- does this report really matter to the economy and the markets? joining us for more is my guest host for the hour, a fourth is now ineteran who
charge of not one but he does professional sports teams, basketball and hockey. of the'neil is the ceo sixers and the new jersey devils. he is on the board of a beverage and snack todd s company. he knows how the consumer is doing. mike mckee is also draining me. mike, you always get a dose of reality and you say, the jobs report does not really matter. >> it does not. showing us theis economy is getting better. growth itself, gdp growth, is often the first quarter. we had to snap back in the second quarter and it may be even better than we thought. this quarter is running about 3.5 right now according to projections. the economy is growing.
everyone is worried about what the consumer is doing in retail. the latest numbers, back to school a little bit better than people thought. up almost 5% in the last month of august than they were a year ago. how many job openings are there? there are over 3 million job openings out there. an acceleration in the last couple of months. overall, things are starting to look better at a faster pace for the economy, even if we had one month where the numbers were not as good and were may be subject to seasonal adjustments. >> you have job openings. are you finding it is hard to fill those jobs? >> we have very desirable jobs in sports. we probably hired 200 people this year. that is quite a few in our business. $100 million revenue businesses.
we have probably 100 applicants for a job and do an intense screening process very >> are you seeing many more applicants for each job? i think it has been the same for the last five or six years, openings for consumers is pretty good right now. jobs are available and when and you just have to go hunt and go get them. whens it surprising to you you saw how few jobs were created that month? >> i do not track it like the two of you do. me.000 jobs sounds good to i like it and i like where the economy is. anecdotally when i talk to ceo's is an fans, they feel comfortable. >> they're buying tickets and food very ok. in a business where you sell companies as well as
tickets. you're looking for sponsorships and things like that. how is that going? >> pretty good. we're up considerably from last year. functionaltle more on how is the team performing. have hope in both markets, which is pretty good. as i am out there talking to business leaders, they feel good here they are anxious about what is happening internationally isis -- you nationally. the isis crisis is on their minds. , and the the economy willingness to spend. >> what about looking at the fed and how they're keeping that money cheap. does any of that play into ceo confidence? >> for us, that is more about fans. some people feel a sense of wealth when the market is up.
>> it has been the riches of the rich who have benefited from the stock market rally. the ones who are are doing really well. the top 3% really mattered to you. >> the top 3%, i do not know about the net wealth. probably 150,000 dollars per year. those are our ticket buyer's for sure. stay with me for the hour. thank you so much. marriott. up to win yet another double. u.s. open champion -- we will be back. ♪
over the nextrs three years. ceo and president joining me now. great to have you with us. your investors say you are holding today in washington. i know you are still investing in your hotels and still investing in your company. why 20% less than before? wes our brands are sought after by real estate partners. we own almost nothing. we are in the business of managing hotels and our brands. great partners all around the world. the stronger around the platforms, the more likely they are to want to invest in us and the less our capital is needed in those deals. in the next three years, we just do not think that much capital will be needed. >> because why?
>> because we have got great real estate art nerds out there with great app tight for growth. the model we are laying out this morning for the investment is, what in washington does marriott's business look like in 2017, making certain assumptions about the economy, of course, how same-store sales growth -- grow. new hotel 200,000 rooms. most of those are in our pipeline. we know what kind of capital is necessary for them. in the entirety, it is less than what we looked at a couple of years ago when we looked at the three-year model. >> some of us made a lot of the fact about 70% and percent of your rooms are in the u.s.. expansion, international markets, will that be much more of focus in the next three years? >> it is a huge priority to us.
growth0% of our unit will come outside of the united states. travelseeing global really travel coming out of the developing world, expand dramatically. we had one billion international trips for the first time in 2012. i suspect by something like 2020, we will see 2 billion .rips annually and i will be great for our business. >> also, what corporate customers are looking for catering through the business traveler. another subject of hot debate, the same debate you at here and airlines, this charging of fees, it has only grown more and more and doubled in the last decade. keep about 89%s of those fees. are they only going to go up and how do you feel about them?
story. is an odd i am not quite sure why it is one that has been repeated so often. the hotel business at marriott did not -- we do not charge for bags. by large, to book a room and .ancel it unless of course you get a lower prepaid rate, still a very unusual thing for our customers to want to do. the fees we have charged are very low in number. we are not heading toward a model like the airline industry and we want very much to welcome our customers. i think we are doing that. >> thank you. great to see you. president and ceo of marriott international, their investor day is today. coming up, the new york retail and real estate market. we will talk to one of new york's top commercial real estate brokers.
>> you are watching live on bloomberg television. i am betty liu. scotland is considering breaking away from the u.k. at for the first time, a poll indicates a majority of voters in gotland favor independence. the u.k. government is trying to persuade the company to stay by offering greater fiscal economy. the u.s. ruled last week the company was grossly negligent in the 2010 gulf of mexico oil spill. a review of the ruling that would require to pay large sums
not injuredpeople in oil spill. $350 million received for the .tandard -- family foundation -- the hourminutes past as we kick off is monday and the trading week. bloomberg television is on the market. olivia sterns, our markets correspondent, has much more. >> thank you. time now for futures in focus. gold futures starting the week little changed. are easy between russia and the ukraine over the weekend. what is likely to move the price of gold going forward, ken hoffman and also todd horwitz, the founder of average joe
options.com. let's start with you. gold traders have mystified a lot of us this summer in the face of major political risk. a rise of the islamic stay in iraq. gold is down 9% in the past 12 months. what is going on? >> it is interesting. the number one safe haven today seems to be the u.s. dollar. number two is gold. if i am in great written and i have william wallace running and saying i, have to get scotland away from britain, gold is up 2% from last week. when you are seeing turmoil in those currencies, gold is going up. people who like to structure trade to say, i think there might be turmoil and gold, you --ld structure a deal where with long, british pound gold. king and thear is
gold price is down. >> interesting. perhaps gold losing a little bit of its luster at the safe haven. with all of that in mind, how would you be trading gold right now? >> good morning. gold has been in a wicked congestion pattern over the last year. i will use that 1240 level and right below it, i will get out and move on. chance to outstanding get back to the 1340 level, based on what is going on. if it loses some of its strength, that will be better for gold. gold is benchmarked against the u.s. dollar. we will see gold star to move back higher.
to 1340. back >> let's put your trade in layman's perspective. severeld explain what congestion means. if you buy gold at the current and then you close it, gold futures covers 100 ounces. total for the contracted $7,000. why is that the level? gold could go a lot higher, just as it could go a lot lower. the first target i would look for to create major resistance that might turn away. gold eventually could probably go back to the highs of 1920's. timeok at one level at a and the next big level in gold
would be 1340 in my eyes. that would be my first, initial target. i would move up my support level and my exit point higher, hoping it would break through and go higher because i think everybody should own a little bit of gold andheir long term portfolio in debt -- in their investment. >> thank you for joining us here , a little bitman of an expert on william wallace. dexia. >> all right. thank you. our markets correspondent. last week, high-end retailer announced its first ever foray into manhattan. colossal, three-story flagship store in 2018. i was joined last week by the market ceo and asked her about any incentive they received.
>> there are always negotiations that go on in these kinds of deals. >> not forthcoming on that front. someone who might have an idea, the chair of the retail group. a who's who of luxury retailers, including many of the top brands on new york ossie's fifth and madison avenue and is, my guest host for the hour, 76ers ceo, scott o'neill. let's start with you. give me a clue. what have they got? >> everything area the works. this, related on a retailer, they are relentless. they had worked on trying to make a deal with nordstrom and time warner. bailey's felt we needed to have more department stores in new
york. for a deal like this, they build the location out, they virtually give them a turn. >> does that mean they build this as a loss? >> i do not think related is a loss. this is an anchor that will ensure traffic there >> are they willing to lose to gain? >> even if there is a loss on the deal, and i am not saying there is, there is a huge gain for the project. it not only attracts major companies offshore, but it ensures they will have a retail environment. to do it better than anybody, they have showed us that all over the country. warner,cially in time columbus circle, which no one believes in, i don't think it is a matter of dollars. it is an investment in building
a city. >> we are talking about it now. been in this business, per se, but you know a lot about real estate. >> i do there and i spent a lot of time on the real estate midtown. how do you become the clean of retail? how does that happen? gave was a newscaster who me the title many years ago and i cannot remember which. it was a turning point and it just stuck. >> they now go to you. >> we hope so. there are others, but we do not mention them. >> you mentioned the anchor. talk to us a little bit about how important it is. we believe that -- we believe in transference. others will follow desirable brands there and if we do this at a breakeven, there are other follow.ey will
>> absolutely. they have been in conversation with several trophy retailers. they have coach therefore the authors. they are probably going to get similar.ajor center retailers really follow each other. i have an expression that i do not want the retailers to get angry but they are like sheep. they flock together. it is the synergy of having them altogether. what this will do, it is really, the westside has never been known for great retailer, certainly not luxury. until a few years ago, there were -- they were all in sweat pants and sneakers. followed and else that went on broadway. alumbus circle was certainly drug. the lineup is continuing. >> what about cannibalizing their business? >> that is so far away. it is very small.
they call it a department store, but it is really a specialty store. they have clientele. with a name like this, people will follow. they set up a pop-up on the boat and people have been waiting for so long. >> is it a little bit like whole foods? ofy will sometimes go ahead the market and sometimes follow the market. when it goes in, it is the stamp of approval. >> it is. whole foods will still have that component at this project. whole foods is the hypermarket concept. you're absolutely right, a department store is a traffic generator. a name like this, it is not goldman sachs. we love them.
please. , a lead is a new name brand. york and wen new believe in luxury and we believe in the westside. >> exactly. that is key. thank you so much. the vision is coming to life there. thank you so much for joining us. stays with me through the hour. another nba team is up for sale over racial remarks. we will tell you what the owner of the atlanta hawks said exactly. ♪
of the e-mail, written two years ago. focus on the hawks attendance problem and their inability to track suburban -- to attract suburban white fans. he said, "my theory is that we scared away the focus on the has attendance problem and their whites and there are not enough fans -- he called his e-mail inappropriate and offensive. the hawks are the first nba team to hit the market since the l.a. clippers sold for a record $2 billion after former owner don stirling made his own racist remarks, which were recorded. still with me is the ceo of the 76er's and the ceo of the new jersey devils. what is going on here? is there an epidemic of owners living their foot in their mouth? >> i hope not. i was briefed over the weekend and do not know as much as i should over this here it a couple of years ago, this happened. >> he self reported, which is remarkable.
maybe there was pressure elsewhere that they would expose this. who knows. we are all speculating at this point. know with steve ballmer bind the clippers, that ended up eating a good thing for the franchise. he got quite a deal and the teams value went up. seeing a similar situation with toss, do you expect something similar to happen? >> i would imagine that when you have the franchise in the game in such great shape on the court . attendance continuing to rise, and the business being so solid. and we have a great stability with tackling problems head on and bringing transparency. an amazing guy. we have great leadership, a great market where the market is very strong right now. these gemsve 30 of and people want in. it will do very well. his e-mail about attendance and trying to get
people into the stadium, that is a problem for various leagues. the nfl is having trouble getting fans at the live games. what about you guys? >> the nfl is fascinating. on tv, it is a great experience. nba hockey, i think hockey is an incredible live experience. i think basketball, you have got the best of both worlds. attendance continues to go up and it will go up for us this next year. christie you have to do different things to get them into the stadium? less it is not that we're doing different things. given the way fans are buying, we have to reach them with different channels. a young lady was in my office and i walked by her during a game last year and she had her phone out like this i said, what are you doing. she said, i'm faced timing a guy who wants to sell -- buy tickets. i'm showing him what his seats will look like. >> she was sitting in the seats
she was trying to sell him and facing the phone out to the court. pretty cool. >> that kind of technology and integrating social media and technology into the fan experience, that is what some of the team owners were saying to us, stephen ross, who owns the miami dolphins, was on the program last week. i want you to hear what he said about this. >> we have to figure out ways, how do we make the experience better in the stadium. we are doing a lot like in miami. i am renovating the stadium and really making it a new stadium and giving us the convenience and incorporating the technology people want today. >> on attendance, how much of the onus is on the owners and how much is on the league as well? >> it relies on operators to do that. rich --ht in ritz-carlton to do training. you can imagine an elite training, a brand i am really fond of. doing an incredible job
anticipating needs. another thing, we created a crew that creates human arrows. when you get off the train, you will be greeted by, how can i people every 10 yards walking you into the building. we signed up with a new food service writer in dallas to bring a food and wine experience, a festival type experience. you will have celebrity chefs, a boardwalk in the upper level, and whole new way to consider how you go through our corrupt -- culinary experience. >> the main draw will always be the celebrity athletes. >> our expectations are higher as fans. it will change the ice to a 3-d movie screen for the game. do you expect this as a fan? maybe not. it makes you feel better about the value.
when you go to the game and spend the kinds of dollars we're asking you to spend on tickets, it is nice to have a good food experience and a total show. >> it is nice to have good food and good drinks anywhere. of the'neill, the ceo philadelphia 76ers and the new jersey devils, my guest hosts for the hour. we have much more in sports where the fifth u.s. open, mike and bob bryan will be in the loop to talk tennis and winning their 100th team title. we are bringing you the trophy as well. we will be back. ♪
american men and doubles teams are increasingly getting a smaller portion of the prize money. joining us with more are the bryan brothers themselves and also with us is the ceo of the philadelphia 76ers and the new jersey devils. this is a big issue we have talked about in tennis. singlere no american competitive singles men these days. >> i'm glad you're here. congratulations. >> huge accomplishment. >> i think tesla has become such a global game. there are countries all over the world playing this great sport. the u.s. was spoiled in the 80's and 90's. guys have been gobbling up
all the titles. we have a guy who is 15 in the world. we do not have top players like we used to. that could change and the next generation of players, -- >> let's talk about you guys. you have incredible athletes, incredible success. congratulations again on a title. no surprise for anybody. i want to hear about your business success. you have broken through for sure. personalityreate a as doubles title champions? >> does not hurt in twins. we are probably the marquee doubles team out there. we do a pretty good job. commercial run, good agents that help us out. doubles will not be like singles unless he gets on tv. >> he look like models and i am sure that does not hurt you requested is the makeup.
>> one quick story. i have an apartment in new york and was commuting back in philadelphia. i had given my key to my apartment to a friend of mine, a long-term nike guy. i said, i will be coming back and forth and traveling a lot. i come in late at night and tom is in my bed. it was really awkward. so after saying, who are you and get out of my bed, that was another great twins american doubles team. do you draw any strength from those and others who came before you? >> philly. we were chasing their brother record for a while. 10 titles. stuck on nine for eight months. finally, we wrote on our shoes. it, but we also looked at the jensen brothers, these guys won the french open in 1993. they were really about
entertainment value, they ride in on motorcycles & every last autograph. we kind of adopted that. we like to show the fans a good time. that will make doubles bigger. >> you have been playing tennis since you are six years old. >> two years old. >> you're talking 30 plus years you have been in tennis and you have played at the highest level of the game. at what point do you say, you have 100 forum and titles, you have made a lot of money. hangdo you say, we will our hats and go enjoy this? >> we are still hungry. winning a title like this is super special. this is the pinnacle of the sport. europe.go to asia and it is a whirlwind. , trying tokeep going get another gold medal there. there are guys that are 42. you can play doubles longer. it does not beat up the body as much. fors there a special mass
each of you that stand out in your mind and you say, ok, this is one that we all the sudden broke through or this is one i will cherish forever. >> you never know if you'll get over the hump, but one trophy in the trophy case, it is a gold medal. it is not something that transcends the sport. everyone who comes to our house, they want to see the gold here they want to hold it and feel the weight. i traveled around with that gold in my racket for six months. it was wild. >> getting back to some of the issues in tennis, scott, you do not have this problem because fans love hockey and football. it has been harder for tennis to get a bigger number of fans, younger fans, to join in tennis and become more mainstream. tot do you think they need do, and what would you guys do since you are the ambassador of the sport? >> they are really healthy right now. the u.s. has a lot going on.
the big three sports. asia, there are people camped outside of our hotel. it feels like we are superstars, which is amazing. in the u.s., we do not get tv but we feel like stars at the tournament and stuff. >> how do you get more younger players question mark >> one thing they're doing, they have the little courts now. can you talk a little bit about that? >> yes. it is exposing younger kids. tennis is not as intimidating. they are just trying to expose millions of kids to tennis and hopefully, that will bring the next big name. if you just get the numbers up. that is the key. >> right. the u.s. open is incredible. immunityat back into tennis and grassroots tennis. talk to me about your dad, who is your coach. do you guys have a book?
>> no book yet. >> i could not put it down. i was really fascinated by it. do you have crazy dad stories about him working you and coaching you? >> every tennis player who gets down to the level has a unique situation at home. no tv in our house growing up. take tv out and spend time doing homework. , we are good musicians. we did work hard and we did all of our chores for a whole year to get nintendo. we can only play fridays for one hour. i was his role. and tuesday, three clock a.m. we were playing super mario brothers and then he would come down and we would say, turn it off. >> i have thrown a phone out the window as a father. i am not proud of that. >> what do you do?
this is beautiful, obviously. it represents so much in your career. after you win? >> we had a great night with all our friends. after andwed up they're really good friends, they're sitting right across from each other. turning it back around and heading to chicago. >> can we re-create the kiss of the trophy? >> yes. >> all right. >> all right. entertaining. great to have you with us. again, congratulations for your fifth u.s. open title. coming up next, we have got a lot more ahead, including apple's new iphone, which is about to be released. we will talk about that in a moment.
>> we are about 30 minutes away from the opening bell. you are "in the loop." i am betty liu. the s&p has risen for five weeks in a row. froms arrest stepped down the rental car giant. investors have been pushing for his removal for quite some time. and a possible shakeup in the banana business. chiquita has delayed a shareholder vote on whether to buy a rifle. it seeks talks with the brazilian group that wants to buy chiquita. and electrolux has agreed to buy general electric appliance unit. ge has been trying to sell the
unit for roughly 6 years. is the company breathing a sigh of relief that got the deal done? alix steel has been digging into the numbers. >> six years in the making for this deal to happen and the price is much more than expected , the $2 billion that analysts had been looking for. it is an appliance business, huge drag on profits. one analyst said that without this unit and the energy management unit, operating margins could be upwards of 18% this year. now they will be like 16%. billion andbout $1 wound up diversifying more into a share, ramping up competitiveness in the u.s. come and the goal is to sell it and now they did. >> ge has been selling assets like crazy. what is left for them to sell? >> they are looking to divest $4
billion in assets this year. .xiting nbcuniversal sold lasted business for $11.6 billion. they spun off the consumer financing operation as well. it wants to be an industrial company. this is the goal, why they are trying to slim it down. ceo jeff immelt says that he wants industrial earnings to make up about 75% of ge earnings by 2016 them up from 50% last year. this is all a part of the shift. one analyst described to me as like a scrooge -- a huge cruise ship attractive in itself around in a small harbor -- trying to turn itself around in a small harbor. it does from an appliance business to a financing company and the next 10 years will be about power and water, and the next 10 years will be about oil and gas. the analyst at william blair says that oil and gas will be the leader for ge over the next
20 years. a huge growth opportunity as the oil companies drill oil on the seabed floor of the ocean. ge is one of the leaders in that. >> thank you so much, alix . we broke this for you about an hour ago. hurts investors getting what they wanted. the ceo is stepping down. they had pushed for mark frissora's removal. we go to detroit with the story. describe to us exactly in a step that led to his firing. >> it seems the company has not been too clear on what has happened, but from talking to activist investors who have been pushing for this, a lot of mistakes he made. a big consolidation in the industry. they have gone from four or five major companies to three. the company that
initiated the consolidation, is the only company that has not benefited from that. they have older cars that they have not managed properly that they acquired when they made the acquisition. they are running into big lines of big airports in the peak summer seasons and have not been able to capitalize. >> who is likely to take his place, then? >> there has been a big push from investors to bring in scott thompson, the ceo of dollar acquiredwhen frissora it through hertz. there's not a lot of love lost between the 2. thompson is considered very able and he is currently unemployed, so it seems like it would be a decent fit. >> he is looking for a job. the ceo looking for a job. tech giant apple is expected to tomorrownew phones
>> tech giant apple is expected to unveil 2 new phones with one of the models giving in to demand for larger screens. it is not just screen size that apple hopes will woo customers. functionality will be loaded on this device. olivia sterns and julie hyman join me with what is expected from the different aspects. you are looking at the idea of mobile payments and how apple is looking to dominate the area. >> this is something that smart money has done before. they have all tried before but there are reasons to think that apple will be able to develop the critical mass to make mobile payments caps on. ,or starters, they have itunes
they have credit card information for these users on file. and apple is more or less a trusted e-commerce site. and we expect it will allow you to tap your phone to pay for something. the new iphone had the touch id sensor and which can make transactions more secure. the third reason is the timing right now because of all the hacking with regards. -- with credit cards. midst of are in the upgrading their payment system so apple could get their technology incorporated with the payment systems that will be in place for retailers. finally, looking at the demographics of apple customers, he's 10 -- these tended to be the wealthier types of customers. >> they are tech savvy and disposable income. julie, these customers are also spending money on devices that help them become more fit.
>> fitness trackers. the market is expected to grow by 2.9%. if you look at that in context, last quarter there were 35 million iphones that were shipped. still a very, very young market. when you are talking about these dedicated fitness trackers or the smart watches, we are -deviceng some sort of i that could have fitness capability. we got a hint of that when apple came out with something called health care, an aggregator of all your health information. developers have been working on it to feed information to that and it builds on top of that. when you look at the fitness trackers on the market, they appeal to hard-core fitness people. the adoption falls off after people have them for several months, according to some
studies. there are questions about how they work in the overall ecosystem. it is a dedicated device. it is not exist in a larger ecosystem. there is talk about what apple could bring to the table because apple's ecosystem is well-known. >> and the kicker is that in the rumor mill, the consensus seems to be that whenever iwatch is unveiled, it will include the ability to pay mobile with it. >> is expected to be huge for apple? >> no. this is something they could reach out to the 800 million users, this is part of being in ecosystem and apple is trying to be part of the fabric of people's lives. they collect revenue and analysts think that printing billions of dollars a year -- yes, it sounds like a ton of money, but apple made $180
billion in revenue last year so it is a drop in the bucket. and it is the same for never health features it has. -- whatever health features it has. it is broadening beyond people who are physically fit and are exercising a lot and make more about health and fitness. make it about predictive ability. can i tell you what to do to get healthier? it is like other measures of your health. then it is like with mobile payments, you get into privacy concerns. it is interesting to see how they navigate that on this site and the mobile payments i. so much, julie hyman as well as olivia sterns. coming up, one of the senate's biggest bulldogs takes on corporate tax inversions. and along the lines of entertainment, disney wins again
>> date talk about tax and version in washington -- they talk about tax and version in washington today. jack lew was discussing what actions they can take against companies that move overseas to cut tax bills. top democratic senator chuck schumer has introduced legislation of his own to take essentially punitive measures against companies who do this. chief washington course then that correspondent peter cook
businessweek" reporter josh green join me. >> and doesn't have a real chance of passing congress, but is getting the attention of the corporate community because it would go so far in dealing with the inversion problem. democrats are upset about this issue. schumer would target in versions that he would target the deals going on like that to 1994 -- that'll all the way back to 1994. we are talking about deals like tyco international's move overseas. a long list of companies here that have taken this out. he is talking my going back 20 years. schumer's plan will be put out there. it is just a draft plan we have been able to take a look at, but it is a threat to the corporate
community but no real threat in the short-term because there is no sense that republicans will back the plan. the bigger that is administrative action by president obama and specifically by jack lew at the treasury department, threatening to take action in the near future. >> josh, you weigh in on this pick could we see unilateral action from the white house? >> sure, i think we could in the near future, according to what lew said. schumer's plan is meant to prime the environment for that sort of action. he is known as the senate democrat's leading political strategist and is very good at barking anger and demagogue ingssions -- demagogu issues. >> over the weekend we heard from the president who said he was going to delay any action on immigration until after the midterm elections and republicans were up in arms over this, saying that he was basically playing politics and
that it was a cynical move by the president. josh, tell me how that is reverberating right now in d.c. >> i think that is basically true. obama came out at the beginning jim, and said that if house republicans don't reform immigration laws, i will do so myself unilaterally at the end of summer, and people in washington were expecting that to happen. over the last couple weeks there has been a growing pushback from senate democrats, who think this could really hurt them in a number of races in the fall, in states like arkansas and iowa. it becomes clear when you look at polling that the backlash would overwhelm any potential clinical gains democrats would get from a move like this and it could potentially cost them control of the senate. this is about politics and i think obama was basically acknowledging the fact that this is not going to help his party in november and therefore he is going to punt. >> daddy, there are a lot of actors and immigration groups
who are upset with the president for doing this and there are democrats in the senate who are breathing a sigh of relief, because as josh when in out, they think this is a net plus when it comes to elections. what happens if democrats still lose the senate and they don't have his immigration action as well? another turning to issue that the president has tried to move ahead on, side from immigration, is more gun control. that seems to be dead in the water as well at this point. you say that because of that we may have peaked gun sales in the united states. >> one of the remarkable stories during the obama years with the sharp rise in gun sales and the sharp rise in the stock prices of publicly traded companies like smith & wesson, who have just had enormous profits and obama'sroughout most of tenure. that's utterly changed earlier this year. there was a chartered financial
stocks fell severely last week. the u.s. has hit when i call gun gun, that even enthusiasts and activists and nra types who are worried that obama is going to outlaw the guns have realized he doesn't have the capacity to do that, he is not going to, and therefore they don't need to keep buying as many guns as they had been buying. i think we see that and the declining sales over the past few months. >> peter, why did it fail? it seemed as if the president had quite a bit of the wind at his back on this. what happened? >> the reality is that this is very cap politics in this country, particularly for democrats in a midterm election year. you have democrats in the same states we were talking about before -- louisiana, arkansas -- being supportive of gun rights is good politically. that is just the reality. the president possibly stash -- thes disagreement
president's day/there is disagreement in the democratic party on this issue and you will not see these pieces of legislation move anytime soon. >> peter, thank you so much for joining us. peter cook, chief washington correspondent. also josh green of "bloomberg businessweek." we have the top 10 stocks you don't want to miss after this break. ♪
>> welcome back. you are "in the loop." liu.betty it is 26 minutes past the hour which means a bloomberg is "on the markets" and we are in the final moments before the opening bell. the jobs report is coming in worse than expected. let's count down to the top 10, the only trades and stories you need to know. olivia sterns and julie hyman joining me. number 10, boeing. shares rising in the green market. deftly marketed and $11 billion
order for the going 737 jet. the airline after going to make a new version of the plane that squeezes in morsi. -- more seats. >> i was going to say, this is -- >> is for the low cost, long haul. >> i don't want to go for low-cost long-haul and be squeezed in even more. >> this is a man who suggested paying to go to the loo. number nine, share of this by a former company plunging in the premarket. the company terminated development of a diabetes drug after it discovered misconduct by some employees. -- the hyperion ceo says it leaves them with no viable inventory cap over. >> number eight, shares of the slab company rising on potential takeover talks. isandline service company looking to buy the company.
they are conducting an internal review of strategic options, according to people who asked not to be identified. >> number seven, go pro. a 12-month price target of $70 per share. shares are falling in the premarket after surging to a new all-time high on friday. tongue anymore. >> is incredible. number six, chiquita brands. shareholder meeting to vote on a proposed acquisition. the company also said it was willing to talk about being brought. an offer of $13 a share for ticketed just last month. >> number five is yahoo!. it is getting a boost on news that alibaba will sell shares in what would be the u.s. fish biggest u.s. -- the biggest u.s. tech ipo ever.
this has been the reason why a lot of investors have bought yahoo! shows, trying to capitalize. >> number four, tesla. the electric automaker may partner with toyota again in the future while tesla and toyota have no definitive plans. ceo elon musk says he envisions a larger project with the electric vehicle -- rav4, i guess. the comments come as the carmakers wind down sales of the jointly developed car. >> and he is moving to nevada. number three, ford. downgrading it and lowering the price target by about a dollar. it cites a peaking u.s. auto cycle, among other factors. >> number two, general electric. buy the ge home appliance unit.
it would create a rival for whirlpool and a company that would control what percent of the north american market. >> number one, hertz. we have been following this story since it broke this morning. is steppingssora down. investors have been pushing for his removal, citing accounting and operational missteps. ryan mcdonagh will serve as interim ceo. there goes the opening bell on this monday morning. ofkets kick off another week trading. i want to bring in the chief equity strategist at wells fargo. economics editor michael mckee is joining, because mike has an interesting angle -- by the way, good morning, john. >> good morning. >> mike has an interesting angle on the inflation hawks and now that how they have lost betting run away fromould
easy monetary policy. actually dollars on the table? -- actually dollars on the table? >> the total return for u.s. bond portfolio has been over 14% , 14.5%. $1 trillion worth. long, longthe long, list of people who have called for the end of the bond market. you look at the big losers out there -- a group of these people signed a letter to ben bernanke qe," becauset do it will raise inflation. they lost a ton of money. >> wall street is the place for smart people do stupid things all the time. to get inflation you need things to happen, you need wage growth. the next things more expensive -- it makes things more expensive. >> we were just showing the letter they wrote to ben bernanke in 2010 saying "don't do this."
look at some famous names on the list. just amazing. >> it is amazing, but those calls continue, even years later at being proven wrong. >> the thing i have learned been wrong in markets for 35 years. the way you get wrong quickly is to find something that is really going to happen, but nobody is on the other side of the trade. it takes longer than you think. and then when it finally arrives it will go on for a while. but there is no real sign of inflation. the whole generation of men and women who run corporations today got there by cutting costs, not raising prices. how do you change a lifetime of training like that? just doesn't work that way. >> does it mean all clear for stocks? >> is never all clear for stocks. is a very good environment to buy stocks. the fed has been accommodated for a while.
even when he finished tapering there will want to encourage, not discourage the economy. corporate profits will be another surprise for people. people say to me, you can't cut costs forever. you can't increase productivity continually. accommodative fed, earnings still surprisingly to the upside, albeit modestly. valuations are in the middle of the last 20 years. what is wrong with that? the timing wrong, you have got to get the timing right to make money. when will we see inflation pickup? >> oh, not this year, not next year, probably. >> we will have you back on. >> please do. when you see price increases stick -- i can't get a wage increase -- my managers don't think i can pass it along. when they come to believe they can pass along price increases, you not only have higher prices, you have a system of inflation -- >> but there is a difference
between inflation and "inflation." what is the danger of something getting out of control? 2% is not a problem. >> not really inflation the way we think about it. it took 20 years for it to build up. admittedly, the bond market rally started when i was 27 years old. better said on tv that -- [laughter] going on for a while but it is still going on. i look back at history and very rarely do you go from inflationary straight to deflationary concerns. there's the white road in the middle. >> is gradual, versus a shock to the system. >> at some point people think inflation is your friend. deflation is your friend. at the beginning it is sweet. >> one thing struggling with the specter of inflation -- you say to buy europe. europe is two years behind the
u.s. i am going to respectfully disagree and i would argue that the patient is sicker and the medicine is less potent. zero growth in second-quarter gdp. inflation, 0.2% in august. as for the medicine, not only is mario draghi contending with the political opposition from the bundesbank, but there is also serious questions about whether or not he has the political license to do this because they don't have a fiscal compact. , a bloombergcrook news columnist, writing about this of the week, saying that the deeper issue with quantitative easing is simply endowed. he can't do what ben bernanke could. and saidd be snarky that the markets have been up since ben bernanke did what he did. the united states has a much better system. i think people in europe want things.
they want to have more things for themselves and their families. the system may not be as amenable to doing that as it is in the united states, but i think that things are changing in europe. cheap versus the u.s. for 2 years for a good reason. they were in a fiscally induced recession come without offsetting monetary stimulus. i think that is changing. right, thoseutely problems were there before and they will be there later on and hopefully they will get addressed at some point in time should they did invent capitalism over there at one point. they will see that other systems work better. bad systems have to fail a little bit before you get good systems in place. everything you said is true for five years, but you have problems that are being addressed right now. >> someone say that capitalism can out of the u.k., which is growing. >> adam smith. he was scottish. [laughter] >> we don't want to go there
staying with transportation, and a futuremissioning with driverless cars. they are making a cadillac that will not require hands-on steering wheels or a foot on pedal. matt miller joins us with more. >> they are getting in on the game. it is not totally driverless cars. do you still need an adult -- you still need an adult hopefully awake. it will be a really incredible technology if it comes on the market already in 2017. they could be the first company to market with this technology because it will be able to drive in a traffic jam. so bumper-to-bumper -- slow bumper-to-bumper traffic. returned -- doing returns and breaks. a huge issue with the recalls and the deaths think -- links to those recalls. here is what mary barra said
last night. firstillac will build the in 2the catalog ctf, years. thanks to a full suite of active safety features, we believe the ctf will be one of the most, if not the most intelligent and connected vehicle on the road. >> different technology she is talking about. they announced three things last night. since cap -- something that will come on a cadillac model they're not named it. the vehicle to vehicle communication technology, which s, and gm is the ct teaming up with university of michigan and four to create smart highways that will try things like your speed and traffic jam and hopefully talk to vehicles were somehow alert you to the situation. >> they are not the first one in this.
there are other car companies that are developing -- >> almost all of them. google is a totally different story on its own. you saw the video of me driving the audi. i went down to orlando in july and drove around in an audi, texting my boss why did it. >> how fast did you go? >> up to 40. they didn't let me go faster. >> you for a little -- >> very much in the beginning stages. absolutely still being developed. put yourcommend you 16-year-old -- which you don't have come a 16-year-old -- in this? absolutely not. but honda, hyundai, all in the game developing these kinds of cars. the question is who comes to market first. >> is a gm? who is it? >> only the engineers they got together in a backroom wouldn't
would know that. they would probably like to claim they are leading, but mary barra is pushing this on because she wants to get past the story every otherls, and automaker is pushing it hard because they want to make money for shareholders. what they are in business for, right? >> that is what they are in business for. matt miller on gm and the driverless car technology. ali baba is kicking off its roadshow for investors here in new york city. the chinese e-commerce company's regard for what is likely to be the biggest ipo ever in the u.s. line it seeks a valuation of as much as $163 and expects to go public next week. it was the slowest weekend at the box office in 13 years. once again, "guardians of the galaxy," a movie that just won't go away, came out on top. there it is the top grossing movie this year overall. weekend ticket sales were the
lowest since 2001. caps off the latest in tech and media every we get 1:00 eastern time only on "bloomberg west ." this is likely time for women. .ashion week top designers are bringing the latest trends to the catwalk. newer games are showing up that are disrupting the fashion scene. for more we are joined by stephanie ruhle. i love that -- disrupting the fashion scene. >> it is not just about winning. when fashion week began, it was the industry insiders and boutique couturier that. now it is mass-market, is marquis, which every fashion business goes crazy for. the fashion industry is broken and we need to bring it back to true style, true couture. there are some who say we don't want to see these designers now
at the likes of h&m and target. we will be having a roundtable to talk about what matters most in the industry and who are the influencers. is it magazine editors like anna wintour or these bloggers who have bigger followings on instagram and twitters and some of the magazines do? >> it is between the magazines and social media, and i am amazed at some of the influence of these fashion bloggers. >> you have 23-year-old fashion bloggers who have more influence than some of the biggest editors out there. stopare saying we will saying -- they are starting to starter rims and following individuals -- they are starting whenart -- guess what, you and i go downstairs and go down to h&m or bloomingdale's, we want to look special. given that price points are so
the duke and duchess of cambridge. kate middleton and her husband, prince william, are expecting their second child. their first is a little more than a year old. suffering from acute morning sickness just as she did with her first pregnancy. the child will be fourth in line to the british throne. william is heir apparent to queen elizabeth ii. outlook.ur global japan's economy fell the most in more than five years. second-quarter gdp was down and an annual rate of 7.1%. bake sales tax hike -- a big sales tax hike gets the blame. another tax hike is set for next year. glaxosmithkline is attempting an ebola vaccine on humans. monkeys infected with ebola
survived without any symptoms. the ebola outbreak in west africa has been the worst outbreak in that region. in the u.k., the pound weakened the most against the dollar in more than a year. brent oil also felt more than $100 for the first time since june 2013. polls show a majority back scottish independence less than two weeks before a vote on that issue. that does it for today on "in the loop." tomorrow, the former aig chairman and outspoken republican party -- harvey golub. and the limited-edition four-door sedan celebrating maserati's anniversary. a lot happening tomorrow at 8:00 eastern time. ♪
high on friday. mastec in the green by about one third of 1%. let's look at what is happening on the treasury markets. treasury yields down a little bit and treasuries are rallying today, continuing the sliding yields we saw last week. last week was the biggest drop in yields for the 10-year since march. the bond market has been so lacking in volatility that investors are more willing than ever to reward wall street for new ideas. joining me is a renowned fixed income expert on the street. . read your story first of all, what jumps out to me is how investors -- haven't investors generally always rewarded firms for new ideas? >> no, absolutely not. it depends on how valuable the -- how muchhow the people are into something new
and to get, frankly, when returns or avoid losses. when you had -- what you had years ago, only 20% of fixed income investors were willing to report -- reward investors for the ip. now it is 54%, and even more when you look at high yields. 60% are going to reward dealers. right now there's not that big beta trade. you have that one-way, obvious that have big on returns. --you can't just find basket by basket. >> two years ago, it was just a broad basket of these. the chances of that happening are getting slimmer and slimmer and slimmer. mathematically is getting difficult to see that. continuum is shifting right now. >> investors are scrambling entities uncharted -- into these
uncharted territories of the bond market. >> you are seeing investors pile into the lease traded assets. you are seeing an increase in more speculative structures of bonds. the bonds are being raised to fund capital improvements, general corporate purposes, dividends for shareholders, things that are more shareholder-friendly and less bondholder-friendly. bonser capitulating to that. -- bonds are capitulating to that. they might not be able to sell ever. they're looking for opportunities in europe and all over the world, places they may not be familiar with. for somebody to do the research until then, you know what, goodbye. >> what has changed? >> people are not seeing an obvious disruption to the situation we have right now. ,he central bank stimulus pricing yields globally. it has been doing this for almost six years.
we do not see an obvious end to this in the near future. the european central bank is coming out with their own plans. it seems to be the environment for a while longer. in this environment, what to you do as an investor? >> start paying for research. >> you do not get any obvious yields and volatility is nil. >> so call lisa and read her story on bloomberg.com today. that does it for "on the markets." "market makers" is coming up next. ..